Fixed-income investments
Bonds are debt instruments through which an investor lends money to an issuer for stated terms. They can play an income or diversification role, but they are not risk-free.
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The headline coupon does not tell the full story. Credit quality, maturity, market price, yield, liquidity, call terms and taxation must be considered together.
The issuer’s ability to make interest and principal payments matters. A credit rating is an opinion, not a guarantee.
Important considerations
Coupon is the stated interest rate; realised yield can differ based on purchase price, holding period, reinvestment and sale value.
Important considerations
Bond prices may fall when market interest rates rise, particularly for longer-duration securities.
Important considerations
Some bonds may be difficult to sell quickly or at the expected price before maturity.
Important considerations
Review maturity, repayment structure and whether the issuer can redeem early under stated conditions.
Important considerations
Interest and gains may be taxed differently depending on the instrument and applicable law. Seek qualified tax advice where needed.
Important considerations
Bonds carry issuer, credit, liquidity and interest-rate risk. Ratings may change and repayment is not guaranteed merely because an instrument is described as fixed income.
Planning checklist
Continue with related information or speak directly with an Alliance consultant.
Common questions
The headline coupon does not tell the full story. Credit quality, maturity, market price, yield, liquidity, call terms and taxation must be considered together.
Bonds carry issuer, credit, liquidity and interest-rate risk. Ratings may change and repayment is not guaranteed merely because an instrument is described as fixed income.
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